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The geopolitical and market bogeymen of the moment – Kim Jong Un, Vladimir Putin, tariffs, cyber warfare – are riding tall in the saddle.
That’s sparked something of a “flight to safety,” which ignited a bit of an uptick in demand for Treasuries this …

If targeting political extremes generates the most profit, then that’s what these corporations will pursue.As many of you know, oftwominds.com was falsely labeled propaganda by the propaganda operation known as ProporNot back in 201…

This weekend, I’d like to take a slightly nostalgic trip down Memory Lane, into the dark, swirling menacing pool that was the dawn of the Internet. OK, that sentence didn’t end up quite where I meant it to.

When I started my newsletter business in October of 2000, I decided to have a little fun with it on this new thing called the World Wide Web, aka “the internet.” If you, like me, are of a certain age, you remember well that we started every web address with the ubiquitous www.

WSJ: “Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again.” Myriad changes to the financial structure have seemingly safeguarded the financial system from another 2008-style crisis. The big Wall Street financial institutions…

It has been 2 months since I last had a chance to respond to reader comments. This seems like a good time to pause and take the opportunity to do so again. Keep them coming!

Today, since I’m in a contrarian mood, I thought I’d focus on ever-so-kindly replying to people who don’t see eye to eye with me…

I really enjoy these exchanges. They get my creative analytical juices flowing, and force me to consider alternative viewpoints which I may not have done initially.

In fact, the more rebuttals I write, the kinder I feel! Which is why I’ve decided to report a special gold opportunity today (continuing our prickly theme with an investment that is the very definition of contrarian right now).

If indeed this inflation hysteria has passed, its peak was surely late January. Even the stock market liquidations that showed up at that time were classified under that narrative. The economy was so good, it was bad; the Fed would be forced by rapid economic acceleration to speed themselves up before that acceleration got out…

What Is the Greek Debt-to-GDP Ratio?

The Greek debt-to-GDP ratio is a whopping 179% as of December 2016, and the total amount Greece owes is €293 billion ($327.5 billion).

While the three bailouts the country has received since 2010 allowed it to keep paying its bills, they continued to increase its debt. They also didn’t help grow the economy. In fact, GDP has slipped 45% since 2008.

Because the duel problems of increasing debt and decreasing GDP are not being solved, the debt-to-GDP ratio is only going to continue to increase in 2017.

In 2013, Greece had the second-highest debt-to-GDP ratio in the world at 175.1%. The bailout funds that the country is trying to secure before July will add another €7.6 billion ($8.5 billion) to its debt load.

Liquidity moves markets!

While the country’s debt in dollars has remained roughly the same at $179 billion, the debt-to-GDP ratio has continued to climb.

In 2013, the debt-to-GDP ratio was 175.1%. At the end of 2016, the ratio was 179%, a 4% gain despite the debt only growing 1%.

The main culprit of the growing debt-to-GDP problem is not being addressed. And that problem is a declining GDP…

Greece’s Vicious Rising Austerity, Decreasing GDP Cycle

Like most Western countries, Greece was hard hit by the 2007-2008 recession. To make matters worse, Greece had been underreporting its deficit for many years. When the recession shrank its economy, Greece’s budget deficit rose to 12.5% GDP.

Must See: This Great Depression-Era “Secret” Helped Transform Two Teachers into Millionaires. Read more…

The huge budget deficit poses an even bigger problem for Greece. The Eurozone has a stability and growth agreement that sets a 3% limit for this figure. When Greece released the actual size of the country’s debt, its credit rating was lowered. As a result, borrowing on the open market to pay its financial obligations wasn’t an option.

In 2010, the EU and the International Monetary Fund (IMF) agreed to the first bailout for Greece. In exchange for the €20 billion ($22.4 billion), Greece enacted an austerity plan that included freezing wages, reducing pensions, and raising taxes.

Since then, Greece has been bailed out two more times. The effects of these bailouts have been twofold. First, the bailouts have caused the debt to grow. In 2008, the country had €240 billion ($269 billion) in debt. By 2012, Greece’s debt had grown 54% to €370 billion ($414.8 billion).

But ballooning debt wasn’t the only problem. Greece’s GDP continued to decline from 2008 through 2016 due to the austerity measures. Greek GDP was $194 billion last year. That is 45% lower than the 2008 GDP of $354.5 billion.

The austerity plans raised taxes to pay the debt, but it shrank the economy in the process. Wage freezes cut into consumer spending, while higher taxes inhibited business growth.

The rising debt burden and declining GDP are a recipe for a skyrocketing Greek debt-to-GDP ratio. Until GDP can grow and borrowing can be slowed, the problem will not be corrected.

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Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases I receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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